TIDMEMH
RNS Number : 6857C
European Metals Holdings Limited
19 April 2017
For immediate release 19 April 2017
EUROPEAN METALS HOLDINGS LIMITED
PRELIMINARY FEASIBILITY STUDY CONFIRMS CINOVEC AS
POTENTIALLY
LOW COST LITHIUM CARBONATE PRODUCER
European Metals Holdings Limited ("European Metals" or "the
Company") is pleased to announce the successful completion of the
Preliminary Feasibility Study ("PFS") for development of the
Cinovec Lithium and Tin Project, which highlights that Cinovec
could be a low cost lithium carbonate producer.
Highlights (all $ figures in this release are US Dollars):
$3,483 /tonne
* Net overall cost of production - Li(2) CO(3)
$540 M (post tax,
* Net Present Value (NPV) - 8%)
21 % (post tax)
* Internal Rate of Return (IRR) -
* Total Capital Cost - $393 M
20,800 tonnes
* Annual production of Battery Grade Lithium Carbonate
-
* Study based on only 9.9% of defined Indicated Mineral
Resources
The completion of the PFS follows a comprehensive metallurgical
test-work campaign managed by European Metals. The PFS has been
prepared by the Company based on technical reports undertaken by
independent consultants who are specialists in the required areas
of work. These included:
* Resource Estimation - Widenbar and Associates Pty
Ltd;
* Mining - Bara Consulting Ltd;
* Front-End Comminution and Beneficiation ("FECAB") -
Ausenco Limited; and
* Lithium Carbonate Plant ("LCP") - Hatch Pty Ltd.
The study is based upon a mine life of 21 years processing on
average 1.7 Mtpa of ore, producing 20,800 tpa of battery grade
lithium carbonate via a sodium sulphate roast.
European Metals Managing Director Keith Coughlan said, "I am
very pleased to report the headline numbers for the Cinovec
Preliminary Feasibility Study. The study highlights the potential
for Cinovec to be the world's lowest cost hard rock producer of
lithium carbonate due to its unique geological and metallurgical
characteristics. These results, coupled with the macro outlook for
the lithium industry, particularly in Europe, highlight the
attractiveness of the project. As a result, we will move directly
into a definitive feasibility study to accelerate the project
towards development.
Cinovec is strategically located in central Europe in close
proximity to the majority of the continent's vehicle manufacturers.
With increasing demand for Electric Vehicles, and Cinovec's status
as the largest and most advanced European lithium project, the
project is very well placed to supply the European lithium market
for many decades."
The Cinovec Project is potentially the lowest operating cost,
hard rock lithium producer globally, due to a number of unique
advantages:
* By-product credits of tin, potash and tungsten;
* The ore is amenable to single-stage crushing and
single-stage coarse SAG milling, reducing capital and
operating costs, whilst reducing complexity;
* Paramagnetic properties of zinnwaldite allow the use
of low cost wet magnetic processing to produce a
lithium concentrate for further processing at
relatively high recoveries;
* Low temperature roasting and reagent recycling;
* Low cost access to extensive existing infrastructure
and grid power;
* Highly skilled workforce and comparatively low costs
of employment;
* Historic mining and chemical plant region - strong
support by the local community for job creation in
areas that have both historic and current operations;
* The deposit lies in a stable jurisdiction, located
centrally to the rapidly expanding electric vehicle
industry, which is forecast to be the main driver
behind increasing lithium consumption; and
* Established and transparent mining code.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 1 - Operating Cost Comparison with
Competing Projects - www.europeanmet.com.)
Summary of PFS
The Cinovec Project hosts a JORC 2014-compliant global Resource
of 656.5 Mt in the Indicated and Inferred categories as shown in
Table 1 below (see announcement dated 20(th) February 2017).
Table 1: JORC 2014 Cinovec Mineral Resource Estimate (19
February 2017)
JORC Cut-off Tonnes Li Li(2) O LCE W Sn
CATEGORY
----------- ---------- ----------- ---- -------- ------ --------------- ---------------
% (Millions) % % kt % t % t
----------- ---------- ----------- ---- -------- ------ ------ ------- ----- --------
INDICATED 0.1 % Li 347.7 0.2 0.5 3,890 0.015 52,160 0.04 139,080
=========== ========== =========== ==== ======== ====== ====== ======= ===== ========
INFERRED 0.1 % Li 308.8 0.2 0.4 2,960 0.014 43,230 0.04 123,520
=========== ========== =========== ==== ======== ====== ====== ======= ===== ========
TOTAL 0.1 % Li 656.5 0.2 0.4 6,990 0.014 91,910 0.04 262,600
----------- ---------- ----------- ---- -------- ------ ------ ------- ----- --------
Notes:
1. Mineral Resources are not reserves until they have
demonstrated economic viability based on a feasibility study or
pre-feasibility study.
2. Mineral Resources are reported inclusive of any reserves and
are prepared by Widenbar in accordance with the guidelines of the
JORC Code (2012).
3. The effective date of the Mineral Resource is February 2017.
4. All figures are rounded to reflect the relative accuracy of the estimate.
5. The operator of the project is Geomet s.r.o., a wholly-owned
subsidiary of EMH. Gross and Net Attributable resources are the
same. Any apparent inconsistencies are due to rounding errors. LCE
is Lithium Carbonate Equivalent and is equivalent to Li(2)
CO(3.)
6. There has been no change to this Mineral resource statement since publication.
The PFS is based on mining 34.5 Mt of material, 100% of which
lies within the Indicated Mineral Resource category. The tonnage
used in the PFS represents only 5.2% of the total Mineral Resource
and 9.9% of the Indicated Mineral resource.
Around 1.7 million tonnes of ore per annum is mined and crushed
in the underground mine prior to being conveyed 1,800 m to the mine
portal and stacked on Comminution Plant stockpile (30 kt live
capacity), providing a buffer and surge capacity between the
underground activities and the processing plants.
The ore is reclaimed from the stockpile to be delivered to the
start of the Front-End Comminution and Beneficiation (FECAB)
circuit that comprises two sections of plant, geographically
separated and connected by a slurry pipeline. The Comminution Plant
featuring a single stage 4 MW SAG mill is located near the mining
portal and delivers milled ore (P(80) < 212 <MU>m) via 7
km slurry pipeline to the Beneficiation Plant, which is located
adjacent to the Lithium Carbonate Plant (LCP).
The beneficiation plant uses Wet High Intensity Magnetic
Separation (WHIMS) to separate out the lithium bearing micas
(zinnwaldite) and produce a magnetic mica concentrate. The ability
to use wet magnetic separation is unique to zinnwaldite ore because
zinnwaldite contains iron in its lattice and is paramagnetic.
Magnetic separation offers cost and recovery advantages over
benefaction through froth flotation.
The LCP receives the mica concentrate from the Beneficiation
plant and extracts the lithium through roasting, leaching and then
purification to produce battery grade lithium carbonate. The plant
also produces a potassium sulphate by-product that becomes an
additional revenue source. The tailings produced by both processing
plants are filtered to produce a filter cake which is dry stacked
in a nearby Tailings Storage Facility (TSF). Although higher cost
than alternative methods, dry stacking significantly reduces
environmental impact.
As confirmed by testwork conducted in both Anzaplan (Germany)
and Nagrom (Perth), the quality of the lithium carbonate produced
by the LCP will meet requirements for use in lithium battery
manufacturing, for which there is a growing market, strong demand
and supply shortages. Current market conditions support the lithium
carbonate price of $10,000/tonne used in the economic model.
The quality of the anticipated lithium carbonate product has
been confirmed by ongoing testwork programs conducted at both
Anzaplan GmbH (Germany) and Nagrom Metallurgical (Perth).
Natural gas is delivered to the project fence by pipeline,
supplying low cost energy for roasting the mica concentrate and
heating the underground mining operations. The electricity
requirement of 22 MW can be obtained from the existing local grid
by constructing 1,000 m overhead line to the nearby existing
switchyard in Teplice.
Potable and industrial water for processing make-up requirements
can be purchased from the local municipality, although dewatering
will supply the bulk of process water requirements.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 2 - Overview of flowsheet -
www.europeanmet.com.)
Cinovec Project Background
The Cinovec Project is located in the Krusne Hore Mountains
which straddle the border between the Czech Republic and the Saxony
State of Germany. The project is within an historic mining region,
with artisanal mining dating back to the 1300s.
In the 1940s a large underground mining operation was
established primarily to produce tungsten for the war effort.
Mining and processing activities continued under the
Czechoslovakian Government with the mine continuing to expand and
producing tin as well as tungsten. Due to the fall of communism and
lower tin prices, the mine was closed in 1993. In 2011, the old
processing plant was removed and the site rehabilitated.
In 2014, European Metals commenced a drilling campaign to
validate the comprehensive data generated by the earlier
exploration activities. The Company's on-going drilling programme
has completed 26 diamond holes for a total of 9,477m drilled,
successfully validating earlier drilling results, adding lithium
grade data and providing metallurgical testwork samples
In 2015, European Metals completed a Scoping Study for
redevelopment of the Cinovec Project ("2015 Scoping Study"). The
2015 Scoping Study highlighted that the size, grade and location of
the deposit make it a very attractive development opportunity and
recommended that the project proceed through to a Preliminary
Feasibility Study. The flowsheet the 2015 Scoping Study was based
on was the as yet un-commercialised L-Max process proprietary to
Lepidico Ltd. Using forecast long term metal prices, the 2015
Scoping Study estimated a pre-tax Internal Rate of Return (IRR) of
24% and NPV of $310 M.
A trade-off study was completed in November 2016 comparing the
operating and capital costs of the conventional sodium-sulphate
roast and the L-Max process. It was concluded that conventional
roasting technology would deliver high lithium recoveries with a
lower operating cost, lower technical risk, less impurity removal,
and be less dependent on potassium by-product credits. The Company
has selected the sodium-sulphate roasting option as the preferred
method of lithium extraction for the PFS.
Mining
The mine design and scheduling has been completed by Bara
Consulting of Johannesburg ("Bara").
Geotechnical Data Gathering and Rock Characterisation
A site visit was carried out by Bara in October 2016, during
which a quality assurance - quality control (QAQC) was undertaken
on borehole logging data generated by EM. Bara also undertook
geotechnical logging of core on site and selected rock samples for
laboratory testing.
The data collected was transformed into rock mass quality by
using classifications such as Rock mass rating (RMR89), Geological
Strength Index (GSI) and Q-index (Q and Q'). Laboratory testing of
core samples included uniaxial compressive strength with elastic
moduli (UCM), triaxial compressive strength (TCS), indirect tensile
strength (UTB) and base friction angle (direct shear) tests
(BFA).
The output information from the geotechnical characterization
phase was used to derive the underground mine design criteria. The
derived mine design criteria for Cinovec are summarised in the
table below:
Table 2: Geotechnical Criteria
CINOVEC MINE DESIGN CRITERIA
------------------------------------------------------------------------------
Aspect Description Value
-------------- ---------------------- --------------------------------------
Maximum stope
Spans spans 13.0m
-------------- ---------------------- --------------------------------------
Potvin's
Stability
number Crown (Rhyolite) 19.70
-------------- ---------------------- --------------------------------------
Hanging wall (Greisen
+ Granite orebody) 39.40
-------------- ---------------------- --------------------------------------
Footwall (Albite
Granite) 52.70
---------------------- --------------------------------------
Endwalls (Greisen
+ Granite orebody) 39.40
-------------- ---------------------- --------------------------------------
Hydraulic Stability graph Matthews-Potvin,1992 Extended
radius Matthews,2002
-------------- ---------------------- --------------------- ---------------
Crown (Rhyolite) 7.20 9.2
-------------- ---------------------- --------------------- ---------------
Hanging wall (Greisen
+ Granite orebody) 9.30 15
---------------------- --------------------- ---------------
Endwalls (Greisen
+ Granite orebody) 9.30 15
-------------- ---------------------- --------------------- ---------------
Critical Stope height (m) Stope length (m)
strike span
-------------- ---------------------- --------------------------------------
25.0 80
-------------- ---------------------- --------------------------------------
20.0 90
---------------------- --------------------------------------
15.0 90
---------------------- --------------------------------------
10.0 90
-------------- ---------------------- --------------------------------------
Rib pillar Stope height (m) Pillar width(m)
widths [m]
-------------- ---------------------- --------------------------------------
25.0 7.0
-------------- ---------------------- --------------------------------------
20.0 6.0
---------------------- --------------------------------------
15.0 5.0
---------------------- --------------------------------------
10.0 4.0
-------------- ---------------------- --------------------------------------
Sill pillar Stope height (m) Pillar width (m)
widths [m]
-------------- ---------------------- --------------------------------------
>25.0 6.0
-------------- ---------------------- --------------------------------------
<25.0 No sill pillars
for stope height
less than 25.0m
---------------------- --------------------------------------
Crown pillar Crown pillar width
dimension (minimum) 40m
-------------- ---------------------- --------------------------------------
Support Strategy
Primary support design guidelines proposed by Barton et al.,
(1974) which are based on rock mass classification parameters were
used for the derivation of systematic support strategy of
excavations for Cinovec. The table below presents the derived
tendon support spacings and sizes based on Barton's empirical
formulas. Other support units offering areal coverage like wire
mesh and shotcrete are to be used in areas where poor ground
conditions persist.
Table 3: Support Requirements
TON SUPPORT SPECIFICATIONS FOR CINOVEC
--------------------------------------------------------------------------------------------------------
Excavation Jr Q ESR Span Support
(m) pressure Tendon length Tendon spacing
(kPa) (m) (m)
------------ ---- ----- ---- ----- ---------- ------------------------- -------------------------
Calculated Recommended Calculated Recommended
------------ ---- ----- ---- ----- ---------- ----------- ------------ ----------- ------------
Decline 1.5 1.9 2.0 6.0 108.25 1.45 2.20 1.3 1.0
------------ ---- ----- ---- ----- ---------- ----------- ------------ ----------- ------------
Footwall
drives 1.5 21.8 1.6 5.0 47.78 1.72 2.20 1.9 1.5
------------ ---- ----- ---- ----- ---------- ----------- ------------ ----------- ------------
Ore drives 1.5 11.2 3.0 5.0 59.64 0.92 1.30 1.7 1.5
------------ ---- ----- ---- ----- ---------- ----------- ------------ ----------- ------------
Passing
bays 1.5 1.9 1.6 5.0 108.25 1.72 2.20 1.3 1.0
------------ ---- ----- ---- ----- ---------- ----------- ------------ ----------- ------------
Cross
cuts 1.5 21.8 1.6 5.0 47.78 1.72 2.20 1.9 1.5
------------ ---- ----- ---- ----- ---------- ----------- ------------ ----------- ------------
Mining Method
The geometry of the payable ore is largely flat or shallow
dipping and massive enough to mechanise using long-hole open stope
mining.
An evaluation was completed to establish the achievable
extraction ratios with and without backfill, based on the
geotechnical design criteria including pillar sizes and stope spans
(see above). The preferred option was to mine with pillars support
only, negating the requirement for a backfill plant.
The payable ore will be split into blocks approximately 90 m
long in the strike direction and 25 m high. The bottom of each
block will be accessed in the central position by an access
crosscut and the block will be developed from the centre to the
strike limit by drifting. The stope will then be mined on retreat
from the block limit, retreating to the access cross cut position.
The stopes will be a maximum of 13 m wide with rib pillars between
stopes of 4 to 7 m wide depending on stope height.
Access to the stopes will be by footwall drives developed in the
footwall at 25 m vertical intervals. All stope access crosscuts
will be developed out of the footwall drives.
The mine will be accessed by a twin decline system. A conveyor
will be installed from the underground primary crusher on 590m
Elevation to surface in the conveyor decline. The second decline
will be used as a service decline for men, material and as an
intake airway.
The modifying factors used to generate the mining inventory used
in the study from the Indicated Mineral resource are:
* Un-planned dilution 3%;
* Un-planned ore loss 3%; and
* Exclusion zones, any ore within 70 m vertical
distance from surface was excluded from the mine
plan. In the northern areas where mining occurs below
the village the crown pillar exclusion was increased
to 150 m.
Underground Infrastructure
Underground infrastructure designs take into consideration the
life of mine plan and aims to support the underground mining
production and development activities. Underground infrastructure
comprises:
* Mine service water systems;
* Mine dewatering systems, including clear and dirty
water pump stations;
* Mine electrical reticulation;
* Control systems and instrumentation;
* Trackless workshops;
* Refueling bays; and
* Underground crushers, tips, and conveyors.
Surface Infrastructure
Surface infrastructure supports the mine plan with consideration
of the labour and mechanised equipment requirements of the
operation in addition to the movement of rock, men and materials.
The infrastructure is divided into two distinct areas, with the
area at the portal servicing the initial development requirements
and the second servicing the production phase.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 3 - Mine Design and Schedule -
www.europeanmet.com.)
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 4 - Life of Mine Grade and Tonnages -
www.europeanmet.com.)
Table 4: Mining Physicals
PHYSICALS (LOM)
------------------ -------- ----------------------------
Life of mine years 22
ROM - ore mined mt 34.46
Tin
Grade % 0.09
Tungsten
Grade % 0.03
Lithium
Grade (Li(2)
O) % 0.65
------------------ -------- ----------------------------
Processing
European Metal's approach for operation of the project as a
whole is to provide a constant feed rate of 360,000 tonnes per year
of mica concentrate to the LCP. The Comminution and Beneficiation
plants will therefore vary operating hours to accommodate
fluctuations in the mine feed grade, to produce the required level
of mica production.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 5 - Mining and Processing Throughput -
www.europeanmet.com.)
Processing Testwork
Front End Comminution and Beneficiation Testwork
This phase of testwork concerned the beneficiation of primary
crushed ROM ore, by primary comminution followed by concentration
of zinnwaldite by wet magnetic separation to produce a
mica-concentrate, which is further treated by the downstream
lithium carbonate plant.
Liberation: Across all lithologies the lithium bearing mica,
zinnwaldite, is effectively liberated from the gang material with a
top-end particle size of less than 300 um. Initial liberation
analysis was supported by Heavy-Liquid Separation (HLS) of minerals
from each of the various lithologies. This was followed by detailed
liberation, mineralogical and petrographic analysis using QEMSCAN
of SAG milled composites with a P80 passing 212 um. These results
confirmed those from the HLS tests.
Lithium Concentration: Initial studies investigated both froth
flotation and magnetic separation for concentration of zinnwaldite.
Magnetic separation was proven to be far superior (91% lithium
metallurgical recovery versus 78%) and was selected as the method
to be optimized for the PFS.
To ascertain the performance of the chosen method and to allow
finalization of the circuit, two composites where produced to
reflect a high-grade and low-grade lithium ROM feed. A
pseudo-lock-cycle flow sheet was implemented to test the effects of
variability of grade and the effects of improving lithium recovery
via scavenging.
The results showed that an additional Wet High Intensity
Magnetic Separation (WHIMS) stage could be used to upgrade the
para-magnetic material to produce a scavenger magnetic fraction,
which is sent back to the start of the circuit. The testwork has
resulted in an estimated lithium recovery of 91% to the concentrate
using a 3-stage magnetic separation flow sheet comprising a
rougher, cleaner, and scavenger stage. The cleaner magnetic
concentrate was reground and passed over a shaking table to recover
liberated tin. The gravity concentrate and the scavenger
concentrate are returned to the beginning of the circuit.
A lock-cycle gravity testwork program was conducted to simulate
the gravity recovery circuit component of the FECAB plant. A pre-
concentrate grade of 8 % Sn was produced with an Sn recovery of
80-90% to the magnetic fraction. A dressing circuit was
approximated for the testwork by using a Mozley Super-Paner
centrifugal separator.
SAGability testwork was conducted at ALS on the three primary
lithologies. Cinovec's ore was determined to be amenable to single
stage SAG milling, which forms part of the FECAB comminution
design. Wardle Armstrong conducted a Starkey SAGability test along
with standard bond ball and bond rod work indexes.
Lithium Carbonate Plant Testwork
Testwork has been conducted at both Anzaplan, Germany and
Nagrom, Western Australia.
Initial sodium sulphate testwork conducted at Anzaplan concluded
that the optimal mass ratio of mica: sodium sulphate: lime is
6:3:1. This roast resulted in a leach lithium recovery of 82.8% -
87.0% lithium at a roast temperature of 850 degC for 1 hour.
Additional roast optimization testwork then focused on
optimising:
* Sodium sulphate ratio;
* Lime ratio;
* Particle size distribution of feed; and
* Roasting residence time.
Based on the best lithium extraction achieved in the roast
optimisation testwork, a bulk composite of mica concentrate,
produced from representative Cinovec core samples, was roasted at
Nagrom, and an initial lithium carbonate produced which had a
purity of >99.5%.
To achieve the high purity Lithium Carbonate bicarbonation step
was required.
Ongoing testwork is focused on fluoride and silica removal.
Initial lime tests have indicated that silica can be removed as
well as part of the fluoride content. Initial tests to remove the
fluoride down to acceptable levels is encouraging and EMH is
confident this can be successfully removed. The acceptable level of
fluoride in battery grade lithium carbonate needs to be confirmed
with potential offtakers.
Tailings Testwork
Rheology and geochemical work was conducted on various tailings
streams. The tests concluded:
* Samples had a definite, but very low level of
radioactivity. No U and Th were detected in the SPLP
leach; and
* Samples were devoid of sulphides and have no
potential to generate acid-mine drainage as confirmed
through both the ABA and NAG test. However, the
Neutralisation Potential of samples were also very
low and samples also had a very low total C content.
No tailings testwork has yet been conducted on the lithium
carbonate tailings streams however, the TSF has been designed to
incorporate a worst-case scenario and to capture any residual
leachate and return it to the plant for processing.
Based on detailed analysis of the testwork results, specific
recovery algorithms were developed and entered directly into each
block in the block model used for mine scheduling. The average
metallurgical recoveries used in the project financial model are
summarised below:
90%;
* Lithium recovery to concentrate -
85%;
* Lithium recovery in carbonate plant -
76.5%; and
* Overall lithium recovery -
* Tin recovery - 65%.
Front End Comminution and Beneficiation
Comminution Plant
The purpose of the Comminution Plant (Figure 6) is to reduce the
size of the ROM Ore to a particle size Distribution (PSD) that
optimises lithium recovery, whilst allowing efficient pumping to
the Beneficiation Plant.
Primary crushed Ore is delivered to Coarse Ore stockpile. The
Ore is milled to 250 um in a single stage SAG mill.
The Comminution Plant is run water neutral to remove the need
for make-up water or disposal at the mine-site location. This is
achieved by returning water from the Beneficiation Plant via a
pipeline. Thus, the comminution plant has the advantage of
operating at zero water discharge.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 6 - Comminution Plant Layout -
www.europeanmet.com.)
The layout of The Comminution Plant maximises the use of the
flat land available upon the top of the ridge, shortening the
overall footprint. Room has been allowed for future pebble crushing
in the SAG mill recirculating load, to allow for retrofitting if
conditions warrant.
Beneficiation Plant
The Beneficiation Plant has two functions:
(i) First, to magnetically separate the paramagnetic zinnwaldite
to produce a lithium rich magnetic stream (mica-concentrate) to
feed the downstream lithium carbonate plant; and
(ii) Second, to then treat the non-magnetics stream with
gravity, flotation, magnetic and electrostatic separation to
produce tin and tungsten product. Filtered tailings are produced
for storage in the TSF.
Magnetic Circuit: Milled product from the Comminution Plant
received via the overland pipeline is stored in the Magnetic
Circuit Feed Tank. The tank is agitated and acts as a buffer
between the Beneficiation Plant and the overland pipeline. The
pipeline slurry density is 56% to 58% solids, whilst the discharge
density required by the Low Intensity Magnetic Separation ('LIMS')
is 40% solids. The LIMS magnets reject ferromagnetic species from
the slurry prior to the multi-stage Wet High Intensity Magnetic
Separation (WHIMS) process.
The WHIMS circuit features a rougher, cleaner, scavenger
arrangement. The scavenger retrieves the non-magnetic material from
the rougher and cleaner units, and returns the 'scavenged' magnetic
fraction back to the start of the circuit.
The cleaner magnetic fraction is reground enclose circuit with a
spiral to remove reduce the PSD to required LCP feed size. Any tin
which is liberated in the process is recovered from the
mica-concentrate by the spirals.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 7 - Beneficiation Plant Layout -
www.europeanmet.com.)
Non-Magnetics Gravity Circuit: The Non-Magnetics Gravity Circuit
treats the Magnetic Separation Circuit's non-magnetics and
concentrates the tin and tungsten minerals for feeding to the Tin
Dressing Circuit, where the final product streams are produced. The
circuit also has the ability to receive tin and tungsten gravity
concentrate as slurry from the Lithium Carbonate Plant.
The circuit incorporates three stages of classification
with:
* The coarse fraction is treated by two stages of
spirals and two stages of wet tables and also
incorporates a regrind mill which is used to achieve
the liberation size of the tin and tungsten minerals;
* The medium fraction is treated by two stages of
spirals and two stages of wet tables;
* The finer fraction is treated with a flotation and
high gravity concentrator; and
* The finest fraction, slimes, is rejected to final
tails.
The concentrate produced from the gravity circuit is sent for
dressing whilst the tails are dewatered via a thickener and
filter.
The dressing circuit upgrades the concentrates through sulphide
flotation. Electrostatic precipitation is then used to separate
wolframite and cassiterite from the scheelite. Dry magnetics
separate the wolframite from the cassiterite to give the final
saleable concentrates.
Lithium Carbonate Plant
The current flowsheet is shown in Figure 8. The Lithium
Carbonate Plant receives a mica concentrate slurry from the FECAB
plant, which is dewatered and stored in covered stockpiles to
create a buffer between the FECAB and the LCP. The concentrate is
mixed with sodium sulphate and lime before roasting to convert the
lithium into a lithium potassium sulphate which dissolves in the
leach as lithium sulphate.
The leached slurry is filtered to separate the PLS (pregnant
leach solution) from the residue. The leach solution undergoes
impurity removal steps to remove calcium, magnesium, fluoride and
silica by precipitation and adsorption. Sodium sulphate is then
recovered from the leach solution (as Glauber's Salt) by cooling.
The Glauber's salt is melted and then crystallised as anhydrous
sodium sulphate for recycle back to the roaster feed.
Crude lithium carbonate is then precipitated from the PLS by
further evaporation and addition of sodium carbonate. The crude
lithium carbonate is re-dissolved to form bi-carbonate. The lithium
bicarbonate solution is filtered and purified by ion exchange
before pure lithium carbonate is re-crystallised by heating the
solution causing the bicarbonate to decompose. The battery grade
lithium carbonate is then dried, micronised and packaged for
sale.
A fertiliser grade potash (potassium sulphate) by-product is
also recovered from the depleted lithium carbonate solution (spent
liquor). In this circuit, Glaserite double salt (Na(3) K(SO(4) )(2)
sulphate) is precipitated by evaporative crystallisation. Potassium
sulphate is then recovered by decomposing Glaserite in water to
form soluble sodium sulphate and solid potassium sulphate. The
potassium sulphate product is then dewatered, dried and packaged
for sale.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 8 - LCP Process Flowsheet -
www.europeanmet.com.)
Tailings
All the processing tailings produced by the Beneficiation and
Lithium Carbonate Plants pressed into filter cakes to allow dry
stack impoundment a close distance from the processing plants.
Tailings consists of approximately 1.5 Mtpa of FECAB material and
500 ktpa of LCP material (mostly leach residue).
Although dry stacking is the more expensive compared to
traditional wet deposition, it was chosen due to the following
advantages:
* The higher safety factors associated with the design
versus conventional storage facilities. The region
has historic high levels of rainfall thus dry
stacking reduces the amount of water to treat by
reducing the TSF footprint;
* Progressive rehabilitation is possible, spreading the
cost of closure over a longer time when compared to
conventional storage facilities; and
* Filtered tailings allow better recovery of lithium by
recovering more liquor.
During operations tailings, a dried on a filtered press and
dumped on a pad. Wheel loaders and articulated trucks transport the
tailings approximately 600 m to the TSF for compaction and
impoundment.
An initial TSF cell was designed to accommodate the first two
years of combined tailings, with the associated capital cost
included in the capital estimate. The TSF is lined and features
water collection and diesel powered decant pumps for returning any
run off water to the processing plant. 3D model was created to
facility the capital cost estimate.
A contractor will be engaged for tailings disposal, an operating
cost of $1.50/tonne for LCP tails and $1.0/tonne for FECAB tails is
incorporated in the operating cost model.
Environmental
The Project is governed by Act No.100/2001 Coll., on Environment
Impact Assessment (hereinafter referred to as the "EIA Act"). The
competent authority is the Ministry of the Environment (Environment
Impact Assessment Department). An integrated permit is issued upon
completion of the EIA process.
The EIA documentation is required to be structured as
follows:
* details concerning the notifier;
* details concerning the development project;
* details concerning the status of the environment in
the region concerned;
* comprehensive characteristics and assessment of the
project impacts on public health and the environment;
* a comparison of project versions (if any);
* a conclusion; and
* a commonly understood summary and annexes (opinion of
the Building Authority, opinion of the Nature
Protection Authority, expert studies and
assessments).
The following expert studies and assessments must be compiled
during the EIA Documentation preparation stage:
* noise impact study;
* air quality impact study;
* biological survey;
* human health impact study;
* transport impact study;
* landscape impact study; and
* water quality and hydrology impact study.
In this case, with respect to the location of the project at the
border with Germany, an "international assessment" provision
applies (Section 13, Act No. 100).
The Company commenced the EIA process with a baseline study,
prepared by GET s.r.o an independent Czech based environmental
consultancy, which identified the environmental areas to be
assessed and determined preliminary outcomes. The underground mine
and surface portal is located on the border of or immediately
adjacent to environmentally sensitive area. From that perspective,
the EIA will focus particularly on project impacts on European
protected areas Natura 2000 (protected birds) and mine water
discharge into surface streams. The Company has re-positioned key
infrastructure to minimise impacts to both the environment and the
community and has placed crushing facilities underground to
minimise noise as well as enclosing the mill to further reduce
noise and visual impacts. Considering the long-term mining history
in region and at the deposit itself, the project will not
significantly impact the environment.
Operating Cost
The average operating cost for the Cinovec Project is $3,483 per
tonne of lithium carbonate, after by-product credits.
Table 5: Average Project Operating Cost
Average Operating Cost (yr. 3-20) $M pa $t / ROM $t / LCE % Op Cost
---------------------------------------- ------ --------- --------- ----------
Mining 40.7 24.3 1,960 38%
FECAB 19.4 11.6 935 18%
LCP 47.3 28.2 2,274 44%
Overall Project Admin 0.9 0.5 42 1%
---------------------------------------- ----------
Total Operating Cost 108.3 64.6 5,211
---------------------------------------- ------ --------- --------- ----------
By-product Revenue Credits $M pa $t / ROM $t / LCE
---------------------------------------- ------ --------- ---------
Sn/W (yr3-2 0) 29.2 17.4 1,404
Potash 6.7 4.0 324
----------------------------------------
Excluding Sn/W Royalties & Transportation Cost
Total Opex (Net of By-product Credits) 72.4 43.2 3,483
---------------------------------------- ------ --------- ---------
Overhead corporate office costs are excluded. The maintenance
costs used in the operating cost modelling includes requirements
for sustaining capex. The cost of tailings impounded is included in
the above numbers.
An estimated 58% of the project's operating cost is variable
(i.e. changes with the production rate). This high variable
percentage improves economic robustness, by giving the operating
team the flexibility to easily scale down operating costs if market
conditions dictate.
Capital Cost
The estimated capital cost of the Cinovec Project is $393 M
based on Q1 CY2017 pricing. The accuracy of the estimate is
considered +/-25%. The estimate breakdown is summarised in Table 6
below.
The capital includes all costs for design and construction of
the plant and infrastructure on the site for the mine, FECB and
LCP, Allowances are also made for connection to off-site services
such as gas, electricity and water, construction of a tailings
storage facility, project contingency and owners costs including
project management team, project approvals, establishment of the
operating team and commissioning.
The capital estimate is based on detailed engineering designs
produced by the independent consultants and inputs from EMH. Each
consultant provided a capital estimate for their respective scope
of works. Based on process modelling and mass flow calculations,
detailed mechanical equipment lists were compiled, with quotes for
all items costing over $100 k. The mechanical equipment list was
then used as a base for factoring other project commodities.
Material take-offs from the 3D modelling were then used as an
integrity check.
As the Project lies on the border of Germany and the Czech
Republic it is exceptionally well serviced by supporting
infrastructure including access to rail, national highways, power,
water, gas, skilled workforce, engineering companies and chemical
companies.
Table 6: Overall Project Development Capital
TOTAL
US$ M
-------------------------------------- -------
Underground Mining Development
Mining Directs 67.3
Mining In directs 3.0
-------
Total Mining Cost 70.3
-------------------------------------- -------
Front End Comminution & Beneficiation Plant
(FECAB)
Comminution - Direct 25.2
Beneficiation - Direct 40.5
Infrastructure -Direct 20.8
FECAB In directs 18.4
-------
Total FECAB 104.9
-------------------------------------- -------
Lithium Carbonate Plant (LCP)
LCP Directs 141.9
LCP In directs 38.0
-------
Total LCP Capital 179.9
-------------------------------------- -------
Total Tailings 2.6
====================================== =======
Overall Project Contingency @10% 35.8
-------------------------------------- -------
TOTAL CAPITAL COST 393.4
-------------------------------------- -------
In addition, a total of $40m is required in working capital.
Financial Summary
The Cinovec Project yields a post-tax NPV (discounted at 8%) of
$540 M and a post-tax Internal Rate of Return of 21%. When
operating in steady state the Project achieves an operating cash
margin of 59% and has an operating cost of $3,483 per tonne LCE.
The key findings of the PFS are set out in Table 7: below:
Table 7: Key PFS Findings
Metric Value Metric Value
-------------------- --------- -------------------------------------------- -----------
NPV @8% Discount $540 M Project Breakeven (IRR=0% ) $/t Li(2) C0(3) $5,200 /t
==================== ========= ============================================ ===========
NPV @ 10% Discount $392 M Avg Li(2) CO(3) Production (yr. 3-20) 20,800 tpa
==================== ========= ============================================ ===========
IRR (Pre-tax) 21.6 % Avg Potash Production (yr. 3-20) 12,954 tpa
==================== ========= ============================================ ===========
IRR (Post Tax) 20.9 % Avg Production Cost (without credits) $ 5,211 /t
==================== ========= ============================================ ===========
Capital Expenditure $393 M Avg Production Cost (with credits) $3,483/t
==================== ========= ============================================ ===========
Total Mined Ore 34.4 Mt Life of Mine 21 Years
==================== ========= ============================================ ===========
Peak Mill Feed 1.8 Mtpa Avg Mill Rate (yr. 3-20) 1.68 Mtpa
==================== ========= ============================================ ===========
Metal Pricing
Metal pricing used for the PFS was as follows:
$10,000/t;
* Lithium carbonate -
$22,500/t;
* Tin -
$330/MTU; and
* Tungsten -
$520/t.
* Sulphate of potash -
Lithium is the key driver of the Project. According to Deutsche
Bank, global lithium demand increased 15% year on year to 212 kt
LCE in 2016, slightly ahead of estimates. Deutsche Bank forecast
lithium pricing to remain elevated relative to historical averages,
but retrace 15% over 2016 pricing levels. Further, the medium-term
outlook is improving and Deutsche Bank has recently lifted their
2019 demand forecast to 380 kt.
The ramp up of new EV model sales from major auto companies is
generally considered to be the key driver of lithium demand in the
short to medium term. Other factors include the increased
production from battery manufacturing facilities and the continued
inventory build within the supply chain.
The Cinovec Project is located centrally and within close
proximity to a number of major European car manufacturers.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 9 - Lithium End Use -
www.europeanmet.com.)
Benchmark expects the average forecasted price range for lithium
carbonate 99.95% to be $ 9,500 to $ 13,000/tonne (USD) between 2017
and 2020.
European Metals has considered this forecast in light of other
independent forecasts such as Deutsche Bank, and on generally
available lithium market commentary.
For the purposes of the PFS with regards to financial modelling,
a long-term average price of $ 10,000/t lithium carbonate FOB has
been used.
Tax
Tax is calculated at 19% and a 10-year tax free window has been
applied as provided for by Czech investment legislation for
projects of this scope.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 10 - LOM Cashflow Projections -
www.europeanmet.com.)
Key sensitivities of capital cost, key operating costs and
revenue are shown in the Figure 11 below.
(Please refer to the announcement on the European Metals Website
for the graphic of Figure 11 - Sensitivity Graph -
www.europeanmet.com.)
Cost Comparative
The PFS highlights the advantages of the extraction of lithium
from Cinovec Ore when compared with spodumene hosted hard rock
deposits. The comparison shown in Table 7 assumes a conversion
price of $365/t for a Chinese based conversion plant and compares
costs for a captured mine, in this case using Pilbara Minerals
Limited (ASX:PLS) published DFS numbers, current spot prices
(latest Galaxy Resources Limited (ASX:GSY) quoted prices for 6%
concentrate) and long term prices as defined in the Pilbara
Minerals DFS.
(Please refer to the announcement on the European Metals Website
for Table 8 - Comparison to Spodumene - www.europeanmet.com.)
BACKGROUND INFORMATION ON CINOVEC
PROJECT OVERVIEW
Cinovec Lithium/Tin Project
European Metals owns 100% of the Cinovec lithium-tin deposit in
the Czech Republic. Cinovec is an historic mine incorporating a
significant undeveloped lithium-tin resource with by-product
potential including tungsten, rubidium, scandium, niobium and
tantalum and potash. Cinovec hosts a globally significant hard rock
lithium deposit with a total Indicated Mineral Resource of 348Mt @
0.45% Li(2) O and 0.04% Sn and an Inferred Mineral Resource of
309Mt @ 0.39% Li(2) O and 0.04% Sn containing a combined 7.0
million tonnes Lithium Carbonate Equivalent and 263kt of tin.
This makes Cinovec the largest lithium deposit in Europe, the
fourth largest non-brine deposit in the world and a globally
significant tin resource.
The deposit has previously had over 400,000 tonnes of ore mined
as a trial sub-level open stope underground mining operation.
EMH has completed a Preliminary Feasibility Study, conducted by
specialist independent consultants, which indicated a return post
tax NPV of USD540m and an IRR of 21%. It confirmed the deposit is
be amenable to bulk underground mining. Metallurgical test work has
produced both battery grade lithium carbonate and high-grade tin
concentrate at excellent recoveries. Cinovec is centrally located
for European end-users and is well serviced by infrastructure, with
a sealed road adjacent to the deposit, rail lines located 5 km
north and 8 km south of the deposit and an active 22 kV
transmission line running to the historic mine. As the deposit lies
in an active mining region, it has strong community support.
The economic viability of Cinovec has been enhanced by the
recent strong increase in demand for lithium globally, and within
Europe specifically.
CONTACT
For further information on this update or the Company generally,
please visit our website at www. http://europeanmet.com or
contact:
Mr. Keith Coughlan
Managing Director
COMPETENT PERSON
Information in this release that relates to exploration results
is based on information compiled by European Metals Director Dr
Pavel Reichl. Dr Reichl is a Certified Professional Geologist
(certified by the American Institute of Professional Geologists), a
member of the American Institute of Professional Geologists, a
Fellow of the Society of Economic Geologists and is a Competent
Person as defined in the 2012 edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves and a Qualified Person for the purposes of the AIM
Guidance Note on Mining and Oil & Gas Companies dated June
2009. Dr Reichl consents to the inclusion in the release of the
matters based on his information in the form and context in which
it appears. Dr Reichl holds CDIs in European Metals.
The information in this release that relates to Mineral
Resources and Exploration Targets has been compiled by Mr Lynn
Widenbar. Mr Widenbar, who is a Member of the Australasian
Institute of Mining and Metallurgy, is a full time employee of
Widenbar and Associates and produced the estimate based on data and
geological information supplied by European Metals. Mr Widenbar has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity that he is undertaking to qualify as a Competent Person as
defined in the JORC Code 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Minerals Resources and Ore
Reserves. Mr Widenbar consents to the inclusion in this report of
the matters based on his information in the form and context that
the information appears.
CAUTION REGARDING FORWARD LOOKING STATEMENTS
Information included in this release constitutes forward-looking
statements. Often, but not always, forward looking statements can
generally be identified by the use of forward looking words such as
"may", "will", "expect", "intend", "plan", "estimate",
"anticipate", "continue", and "guidance", or other similar words
and may include, without limitation, statements regarding plans,
strategies and objectives of management, anticipated production or
construction commencement dates and expected costs or production
outputs.
Forward looking statements inherently involve known and unknown
risks, uncertainties and other factors that may cause the company's
actual results, performance and achievements to differ materially
from any future results, performance or achievements. Relevant
factors may include, but are not limited to, changes in commodity
prices, foreign exchange fluctuations and general economic
conditions, increased costs and demand for production inputs, the
speculative nature of exploration and project development,
including the risks of obtaining necessary licences and permits and
diminishing quantities or grades of reserves, political and social
risks, changes to the regulatory framework within which the company
operates or may in the future operate, environmental conditions
including extreme weather conditions, recruitment and retention of
personnel, industrial relations issues and litigation.
Forward looking statements are based on the company and its
management's good faith assumptions relating to the financial,
market, regulatory and other relevant environments that will exist
and affect the company's business and operations in the future. The
company does not give any assurance that the assumptions on which
forward looking statements are based will prove to be correct, or
that the company's business or operations will not be affected in
any material manner by these or other factors not foreseen or
foreseeable by the company or management or beyond the company's
control.
Although the company attempts and has attempted to identify
factors that would cause actual actions, events or results to
differ materially from those disclosed in forward looking
statements, there may be other factors that could cause actual
results, performance, achievements or events not to be as
anticipated, estimated or intended, and many events are beyond the
reasonable control of the company. Accordingly, readers are
cautioned not to place undue reliance on forward looking
statements. Forward looking statements in these materials speak
only at the date of issue. Subject to any continuing obligations
under applicable law or any relevant stock exchange listing rules,
in providing this information the company does not undertake any
obligation to publicly update or revise any of the forward looking
statements or to advise of any change in events, conditions or
circumstances on which any such statement is based.
Statements regarding plans with respect to the Company's mineral
properties may contain forward--looking statements in relation to
future matters that can only be made where the Company has a
reasonable basis for making those statements.
This announcement has been prepared in compliance with the JORC
Code 2012 Edition and the current ASX Listing Rules.
The Company believes that it has a reasonable basis for making
the forward--looking statements in this announcement, including
with respect to any mining of mineralised material, modifying
factors and production targets and financial forecasts. The
following information is specifically provided in support of this
belief:
The PFS was completed by independent specialist firms with
oversight provided by the Company's Owner's Team under the
direction of Andrew Smith (B.Eng., B.Com from University of
Sydney).
As is normal for this type of study, the PFS has been prepared
to an overall level of accuracy of approximately +/-25% for capital
and operating costs.
a) Production targets and financial forecasts disclosed in this
announcement are based exclusively on Indicated Resource categories
as defined under the JORC Code 2012.
b) European Metals will both commence infill drilling and will
re-access the old exploration drives as part of its next programme
to convert Indicated Resources into the Measured category. Given
the vast quantity of data associated with the previous mine
combined with the size, continuity of mineralisation, geometry of
the deposit, the Company and its Resource Consultants Widenbar and
Associates are confident of achieving this further mineral resource
classification conversion.
c) The PFS metallurgical testwork programme was developed and
supervised by industry leaders in Western Australia and Germany and
was performed by specialist labs in the areas of expertise that
included Anzaplan, Nagrom and ALS.
d) Mr Harman (B.Sc Chem Eng, B.Com) is an independent consultant
with in excess of 7 years of lithium chemicals experience. Mr
Harman supervised and reviewed the metallurgical test work and the
process design criteria and flow sheets in relation to the LCP.
e) In conjunction with the independent consultants' EMH prepared
the process design criteria and flowsheet based on metallurgical
test work and typical industry design parameters.
f) The mine planning and scheduling for the 1.7Mtpa Base Case
were undertaken by independent mining firm Bara Consultants,
consisting of Mr Andrew Pooley and Mr Clive Brown (both mining
professionals with a combined 50 years of mine planning and
operations experience and both fellows of the SAIMM) utilising the
DeswikCAD suite of mining software for UG mine planning.
g) Mining operating costs were based on estimates derived from
equipment and mechanical quotes, first principle manpower buildups
and an extensive industry database.
h) Processing operating costs were estimated based on the
mechanical equipment list developed for the PFS design,
metallurgical testwork and the process design criteria, typical
local labour rates, quoted energy costs and typical consumables
supply costs. The information in this announcement that relates to
Process Plant capital and operating cost estimates is based on
reports compiled by the independent consultants' services and EMH
inputs.
i) Capital estimates are based on preliminary engineering
designs produced by the independent consultants' services and EMH
inputs. Each consultant provided a capital estimate for their
respective scope of works. Based on process modelling and mass flow
calculations, detailed mechanical equipment lists were compiled,
with quotes for all items costing over $100 k. The mechanical
equipment list was then used as a base for factoring other project
commodities. Material take-offs from the 3D modelling were then
used as an integrity check.
j) Mining related geotechnical engineering was undertaken by
independent mining firm Bara Consulting and included extensive
geotechnical logging and laboratory testing.
k) The Project will potentially be the first large-scale hard
rock mine to be developed in the Czech Republic in many decades. As
such, stakeholder engagement with the Government of Czech, both
locally and regionally and in particular with the Ministry of
Industry has been very positive. We therefore anticipate that given
the potential size, scale and significance of the Project to Czech
and the potential downstream use of the lithium product and
assuming any development complies with all relevant mining and
environmental legislation, all necessary approval processes will be
able to be secured for the Project.
l) The Company has engaged a specialist environmental consulting
firm in Czech, GET s.r.o Ltd, to advise it on all aspects of the
ESIA process. This includes all environmental baseline studies.
m) The Company believes that the amount and detail of work and
studies carried out for this Study in many areas exceeds what would
normally be expected at a PFS level.
n) The Company's Board and management have had a very successful
track record of developing and financing mineral resource
development globally. The Company is confident there is a good
possibility that it will continue to increase the mineral resources
at the Project through exploration. The Company is confident that
this exploration combined with the use of only 5% of the Resource
base in the PFS, will extend the mine life greatly from that which
is currently modelled.
o) The Project's positive technical and economic fundamentals
provide a platform for the Company to advance discussions with
traditional debt and equity financiers and forward sales
arrangements. The size and location of the deposit in the middle of
large end users associated with European electric vehicles that is
driving lithium demand will make the project a strategic asset as
evidenced by the large interest shown in the Project by end users
and large lithium specialist companies to-date. An improvement in
market conditions during 2015 and 2016 and a perceived high growth
outlook for the global lithium market enhance the Company's view of
the fundability of the Project.
Based on the above, the Board is confident the Company will be
able to finance the Project through a combination of debt and
equity, or forward sales. In addition, the Company's aim will be to
avoid dilution to existing shareholders, to the greatest extent
possible.
The Company has been well supported by its largest shareholder,
Cadence Minerals Plc which is listed on AIM in London. Cadence has
a total of GBP38m in cash and investments. It has expressed
interest in providing funding to maintain its existing
shareholding. This based with the large interest being shown out of
large institutional broking houses in London provides further
comfort to the Board that funding for the development of the
Project will be secured.
Initial discussions with potential lenders for development
finance have commenced with positive responses to date. In
addition, various confidentiality agreements have been executed
with potential strategic investors and discussions are
on-going.
p) The Study is based on the assumption that all metal produced
will be sold via long term contracts to end users. It is assumed
the lithium carbonate will be sold electric vehicle end users in
both Czech and surrounding countries and that tin and tungsten
concentrates will be sold to Asian smelters for further
processing.
q) Board and Management has been responsible for the study,
financing and/or development of several large and diverse mining
and exploration projects globally. These include the development of
the Ngezi Platinum Mine, Zimbabwe (Zimplats); Cominco Phosphate
(Republic of Congo), Leeuwkop Project, South Africa (Afplats),
Ncondezi Coal (Mozambique) and Talga Resources projects in Sweden.
Based on this experience the board believes that a traditional
debt: equity ratio of 70:30 is potentially achievable for the
Project based on the PFS results. This would result in a capital
and working capital contribution of approximately A$175m which is
in-line with the Company's current market capitalisation.
r) For the reasons outlined above, the Board believes that there
is a "reasonable basis" to assume that future funding will be
available and securable.
s) All material assumptions on which the forecast financial
information is based have been included in the announcement.
Key Risks
Key risks identified during the Study include:
* Adverse movements in lithium pricing;
* Adverse movements in key operating cost inputs;
* Timely project approvals by the authorities;
* Conversion of existing Resources to Reserves;
* Results of future feasibility studies are uncertain;
and
* Project funding.
LITHIUM CLASSIFICATION AND CONVERSION FACTORS
Lithium grades are normally presented in percentages or parts
per million (ppm). Grades of deposits are also expressed as lithium
compounds in percentages, for example as a percent lithium oxide
(Li(2) O) content or percent lithium carbonate (Li(2) CO(3) )
content.
Lithium carbonate equivalent ("LCE") is the industry standard
terminology for, and is equivalent to, Li(2) CO(3) . Use of LCE is
to provide data comparable with industry reports and is the total
equivalent amount of lithium carbonate, assuming the lithium
content in the deposit is converted to lithium carbonate, using the
conversion rates in the table included below to get an equivalent
Li(2) CO(3) value in percent. Use of LCE assumes 100% recovery and
no process losses in the extraction of Li(2) CO(3) from the
deposit.
Lithium resources and reserves are usually presented in tonnes
of LCE or Li.
The standard conversion factors are set out in the table
below:
Table: Conversion Factors for Lithium Compounds and Minerals
Convert from Convert Convert Convert to
to Li to Li(2) Li(2) CO(3)
O
------------------- ------- -------- ---------- -------------
Lithium Li 1.000 2.153 5.324
Li(2)
Lithium Oxide O 0.464 1.000 2.473
Li(2)
Lithium Carbonate CO3 0.188 0.404 1.000
------------------- ------- -------- ---------- -------------
WEBSITE
A copy of this announcement is available from the Company's
website at http://europeanmet.com/.
TECHNICAL GLOSSARY
The following is a summary of technical terms:
"beneficiation" in extractive metallurgy, is any
or "benefication" process that improves (benefits)
the economic value of the ore by
removing the gangue minerals, which
results in a higher grade product
(concentrate) and a waste stream
(tailings)
"carbonate" refers to a carbonate mineral such
as calcite, CaCO(3)
"cut-off grade" lowest grade of mineralised material
considered economic, used in the
calculation of Mineral Resources
"deposit" coherent geological body such as
a mineralised body
"exploration" method by which ore deposits are
evaluated
"g/t" gram per metric tonne
"grade" relative quantity or the percentage
of ore mineral or metal content
in an ore body
"Indicated" as defined in the JORC and SAMREC
or "Indicated Codes, is that part of a Mineral
Mineral Resource" Resource which has been sampled
by drill holes, underground openings
or other sampling procedures at
locations that are too widely spaced
to ensure continuity but close
enough to give a reasonable indication
of continuity and where geoscientific
data are known with a reasonable
degree of reliability. An Indicated
Mineral Resource will be based
on more data and therefore will
be more reliable than an Inferred
Mineral Resource estimate
"Inferred" or as defined in the JORC and SAMREC
"Inferred Mineral Codes, is that part of a Mineral
Resource" Resource for which the tonnage
and grade and mineral content can
be estimated with a low level of
confidence. It is inferred from
the geological evidence and has
assumed but not verified geological
and/or grade continuity. It is
based on information gathered through
the appropriate techniques from
locations such as outcrops, trenches,
pits, working and drill holes which
may be limited or of uncertain
quality and reliability
"JORC Code" Joint Ore Reserve Committee Code;
the Committee is convened under
the auspices of the Australasian
Institute of Mining and Metallurgy
"kt" thousand tonnes
"LCE" the total equivalent amount of
lithium carbonate (see explanation
above entitled Explanation of Lithium
Classification and Conversion Factors)
"lithium" a soft, silvery-white metallic
element of the alkali group, the
lightest of all metals
"lithium carbonate" the lithium salt of carbonate with
the formula Li(2) CO(3)
"Measured" or Measured: a mineral resource intersected
Measured Mineral and tested by drill holes, underground
Resources" openings or other sampling procedures
at locations which are spaced closely
enough to confirm continuity and
where geoscientific data are reliably
known; a measured mineral resource
estimate will be based on a substantial
amount of reliable data, interpretation
and evaluation which allows a clear
determination to be made of shapes,
sizes, densities and grades. Indicated:
a mineral resource sampled by drill
holes, underground openings or
other sampling procedures at locations
too widely spaced to ensure continuity
but close enough to give a reasonable
indication of continuity and where
geoscientific data are known with
a reasonable degree of reliability;
an indicated resource will be based
on more data, and therefore will
be more reliable than an inferred
resource estimate. Inferred: a
mineral resource inferred from
geoscientific evidence, underground
openings or other sampling procedures
where the lack of data is such
that continuity cannot be predicted
with confidence and where geoscientific
data may not be known with a reasonable
level of reliability
"metallurgical" describing the science concerned
with the production, purification
and properties of metals and their
applications
"micrometer" (symbol um) is an SI unit of length
equal to one millionth of a metre
"Mineral Resource" a concentration or occurrence of
material of intrinsic economic
interest in or on the Earth's crust
in such a form that there are reasonable
prospects for the eventual economic
extraction; the location, quantity,
grade geological characteristics
and continuity of a mineral resource
are known, estimated or interpreted
from specific geological evidence
and knowledge; mineral resources
are sub-divided into Inferred,
Indicated and Measured categories
"mineralisation" process of formation and concentration
of elements and their chemical
compounds within a mass or body
of rock
"Mt" million tonnes
"P80" the mill circuit product size in
micrometers
"ppm" parts per million
"PSD" particle size distribution
"recovery" proportion of valuable material
obtained in the processing of an
ore, stated as a percentage of
the material recovered compared
with the total material present
"run-of-mine" mined ore of a size that can be
processed without further crushing
"semi-autogenous a method of grinding rock into
grinding" or fine powder whereby the grinding
"SAG" media consist of larger chunks
of rocks and steel balls
"stope" underground excavation within the
orebody where the main production
takes place
"t" a metric tonne
"tin" A tetragonal mineral, rare; soft;
malleable: bluish white, found
chiefly in cassiterite, SnO(2)
"treatment" Physical or chemical treatment
to extract the valuable metals/minerals
"tungsten" hard, brittle, white or grey metallic
element. Chemical symbol, W; also
known as wolfram
"W" chemical symbol for tungsten
ADDITIONAL GEOLOGICAL TERMS
"apical" relating to, or denoting an apex
"cassiterite" a mineral, tin dioxide, SnO2. Ore
of tin with specific gravity 7
"cupola" a dome-shaped projection at the
top of an igneous intrusion
"dip" the true dip of a plane is the
angle it makes with the horizontal
plane
"glaserite" A colourless or white crystalline
compound, K(2) SO(4) , used in
glassmaking and fertilisers and
as a reagent in analytical chemistry
"granite" coarse-grained intrusive igneous
rock dominated by light-coloured
minerals, consisting of about 50%
orthoclase, 25% quartz and balance
of plagioclase feldspars and ferromagnesian
silicates
"greisen" a pneumatolitically altered granitic
rock composed largely of quartz,
mica, and topaz. The mica is usually
muscovite or lepidolite. Tourmaline,
fluorite, rutile, cassiterite,
and wolframite are common accessory
minerals
"igneous" said of a rock or mineral that
solidified from molten or partly
molten material, i.e., from a magma
"muscovite" also known as potash mica; formula:
KAl(2) (AlSi(3) O(10) )(F,OH)(2)
.
"quartz" a mineral composed of silicon dioxide,
SiO2
"rhyolite" an igneous, volcanic rock of felsic
(silica rich) composition. Typically
>69% SiO(2)
"vein" a tabular deposit of minerals occupying
a fracture, in which particles
may grow away from the walls towards
the middle
"wolframite" a mineral, (Fe,Mn)WO(4) ; within
the huebnerite-ferberite series
"zinnwaldite" a mineral, KLiFeAl(AlSi(3) )O(10)
(F,OH)(2) ; mica group; basal cleavage;
pale violet, yellowish or greyish
brown; in granites, pegmatites,
and greisens
ENQUIRIES:
European Metals Holdings Tel: +61 (0) 419 996
Limited 333
Keith Coughlan, Chief Email: keith@europeanmet.com
Executive Officer Tel: +44 (0) 20 7440
Kiran Morzaria, Non-Executive 0647
Director Tel: +61 (0) 6141 3504
Julia Beckett, Company Email: julia@europeanmet.com
Secretary
Beaumont Cornish (Nomad Tel: +44 (0) 20 7628
& Broker) 3396
Michael Cornish Email: corpfin@b-cornish.co.uk
Roland Cornish
The information contained within this announcement is considered
to be inside information, for the purposes of Article 7 of EU
Regulation 596/2014, prior to its release.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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